Ethereum’s problems are slowing DeFi’s success, and three experts explain why the DeFi team is turning to other blockchains as we read more in today’s latest Ethereum news.
The debate over the feasibility of using ETH as a leader in the crypto space only gets hotter as the Game, NFT, and Defi all gain in popularity. The outlook is bleak given the current situation and high fees, long confirmation times, and slow updates are what worries private users and larger investors. Given the difficulty of delivering an on-demand user experience, Ethereum developers are increasingly turning to other competing blockchains that leverage the application migration process and expand the reach of the coins.
Blockchains like Avalanche, Binance Sensible Chain, and Solana are all seeing significant gains in 2021 and are just proving to be more efficient alternatives to Ethereum, and the upgrade to proof-of-stake is far from complete. According to Nicholas Merten, who created DataDash on YouTube, Ethereum’s advantage as the most widely used blockchain is losing ground over time. In a Twitter thread, Merten explained all the arguments in favor of ETH that could not hold up in the long term, but indicated that the scalability solutions of L2 are not really practical and hardly create a motivation for the takeover:
“L1 should be a lot cheaper. The cost reduction potential of roll-up (L2) can only be fully exploited if more users switch from L1 to L2. We need big players in the existing funding area to bridge users and loyalty programs for LPs moving to L2 etc.
– Nicholas Merten (@Nicholas_Merten) November 20, 2021 “
For example, he claims that people are willing to pay $ 0.01 for Solana fees instead of paying $ 0.04 for transactions on Polygon, the cheapest L2 solution on Ethereum. Ethereum’s problems need to be resolved and developers should focus on solutions to make L1s more efficient. As smart contracts get more complex, people have to pay more and more fees. Merten believes Ethereum needs better marketing and a whole new team capable of holding the community together.